SK Hynix rebounds nearly 4% as bargain hunters return after selloff

Investing.com -- SK Hynix shares rebounded nearly 4% in morning trading on Friday, recovering from a two-day rout as bargain hunters stepped in and options-related buying added momentum following a sharp selloff triggered by South Korea’s surprise interest rate hike.

The stock rose 3.9% to $158.29 after earlier touching an intraday 52-week low of $145.57 which was below its IPO price of $149. Shares had plunged more than 7% on Thursday after the Bank of Korea unexpectedly raised its benchmark interest rate by 25 basis points, its first hike in about three and a half years, sparking a broad market selloff that triggered a circuit breaker on the KOSPI.

Investor sentiment was further dampened after South Korean regulators temporarily suspended approvals for new single-stock leveraged ETFs linked to the memory chipmaker.

Friday’s rebound was supported by renewed analyst optimism and technical factors. HSBC reaffirmed SK Hynix as its top sector pick on Thursday despite the recent weakness, arguing that fears the memory chip cycle is nearing its peak are overstated.

The recovery was also aided by the expiration of the first monthly options contracts listed on SK Hynix’s U.S.-listed shares. The July 17 contracts had dominated trading following the options market debut earlier this week, with traders pointing to short-covering and gamma-related buying as factors that accelerated the stock’s rebound from session lows.

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